Sat January 18, 2014

Donors Pitch In To Protect Detroit's Art And Pensions

Under a deal mediating by a federal bankruptcy judge, a group of local and national foundations this week pledged $330 million to help Detroit's pension fund and protect the city's valuable art collection. With Detroit in the middle of bankruptcy proceedings, city officials had been casting an eye on the Detroit Institute of Art's collection of city-owned art valued at between $400 million and 800 million. The foundation's offer will not provide all the money needed to fund the bankrupt pension fund, but, combined with possible state aid and individual donations, it is hoped enough money can be raised to prevent the need to auction off the artwork. One of the first individual donors to step up was philanthropist Paul Schapp, and he joins us now from member station WDET in Detroit. Welcome to the program, Mr. Schapp.

PAUL SCHAPP: Thank you very much. It's a pleasure to be with you.

NEARY: I understand that you were instrumental in helping to get this whole deal going because you were one of the first people to really offer to donate money - $5 million in fact. What were you hoping to accomplish by doing that?

SCHAPP: Well, there was an article in the Detroit Free Press on December 5th that outlined the plan of Judge Rosen to try and find $500 million that would serve two purposes. One, to prevent the sale of the treasures of the Detroit Institute of Arts, and at the same time help minimize the pain to the Detroit pensioners. But I was struck by what a hard sell that was going to be, unless individuals, family foundations and others would step up and show that there is sort of grassroots support.

NEARY: You understand how all this works much better than most of us do. So, why would that have been such a hard sell without that kind of show of commitment, as you said, from the grassroots level?

SCHAPP: Well, this is unusual to ask major foundations to participate in this way. That's not their normal charter for helping various causes. And because of that I thought it was going to be important, and I believe it was, that individuals step up and make commitments.

NEARY: Three hundred thirty million dollars that has been pledged so far - it's not enough though to take care of the whole pension debt. And I understand that the governor is now proposing that the state should match these donations. Will that take care of the whole debt?

SCHAPP: Well, it might come close to what's needed at least to save the Detroit Institute of Arts treasures. The judge is looking to have the DIA become an independent, nonprofit organization that owns the art and the donations will go to the DIA but flow through them to the pension funds.

NEARY: So, in other words, this would then protect the art museum in the future from ever being under this kind of threat of having these art works auctioned off because of city debt or anything like that?

SCHAPP: Absolutely. That is one of the goals.

NEARY: And also, it seems to me, this then solves the hidden problem here which is how do you weigh such ethereal needs as the beauty of works of art being saved versus the very real needs of people who depend on those pensions.

SCHAPP: Oh, absolutely. Their pain is real but the idea that you would sell treasures to then pay the pensions just was something that would be do demoralizing to this community that we had to step in and hoped that others would do so as well.

NEARY: How are people feeling now? I mean, has it helped with the morale in Detroit that this movement is occurring?

SCHAPP: Oh, I believe so. I think the news about the governor was what we'd all been hoping for. This is a real sign of a community coming together to solve really difficult problems.

NEARY: And this doesn't take care all of Detroit's bankruptcy problems, does it?

SCHAPP: No, it certainly doesn't. But, as the judge points out, it would get out of the way two of the most difficult issues and then maybe some of the other things can be dealt with.

NEARY: Philanthropist Paul Schapp. Thanks so much for joining us today, Mr. Schapp.